Press Release
Spark Networks SE Reports Preliminary Second Half And Full Year 2019 Results
"I am pleased to report strong second half 2019 results for Spark. Our preliminary full year 2019 revenue increased 44%8 to €149 million and Adjusted EBITDA grew 129%8 to €23 million," said
"I am excited to be working alongside the very talented team at
"I am very excited about the Company's future trajectory. Looking ahead to 2020, we are guiding to revenue in the range of
Unaudited Preliminary Financial Results 8
- Preliminary Revenue for the second half of 2019 was €99.9 million, an increase of €48.4 million compared to €51.5 million in the second half of 2018, and an increase of €50.7 million compared to €49.2 million in the first half of 2019. Preliminary Revenue for 2019 was €149.1 million, an increase of €45.7 million compared to €103.4 million in 2018, as adjusted. For both the half year and the full year 2019, the increase in Revenue is primarily attributable to the
Spark Networks / Zoosk Merger, which closed inJuly 2019 . - Preliminary Net Loss was €12.0 million in the second half of 2019, an increase of €10.0 million compared to €2.0 million in the second half of 2018, and an increase of €7.1 million compared to €4.9 million in the first half of 2019. Preliminary Net Loss for 2019 was €16.9 million, an increase of €12.7 million compared to €4.2 million in 2018, as adjusted. For both the half year and the full year 2019, the increase in Net Loss is primarily attributable to the
Spark Networks / Zoosk Merger, which closed inJuly 2019 . - Preliminary Adjusted EBITDA was €18.7 million in the second half of 2019, an increase of €10.2 million compared to €8.5 million in the second half of 2018, and an increase of €14.9 million compared to €3.8 million in the first half of 2019. Preliminary Adjusted EBITDA for 2019 was €22.5 million, an increase of €12.7 million compared to €9.8 million in 2018, as adjusted.
- On a preliminary basis, the Company ended the year with €15.5 million in cash and €95.8 million in debt.
Key Performance Indicators 8
- Average Paying Subscribers is anticipated to have increased by 539.5 thousand to 1.0 million in the second half of 2019, compared to 477.8 thousand in the same period of 2018.
- Monthly Average Net Revenue Per User, or Monthly ARPU, is anticipated to have decreased 9.0% to €16.37 in the second half of 2019, compared to €17.98 in the same period of 2018.
Financial Outlook
- Due to
Spark Networks completing the post-close merger integration work as efficiently as possible, management believes their efforts will result in$30 to$34 million (€27 to €31 million) of Adjusted EBITDA in 2020. Spark Networks anticipates 2020 annual revenue of$212 to$220 million (€193 to €200 million).- For H1 2020, the Company expects to achieve revenue of
$110 to$112 million (€100 to €102 million) and EBITDA of$15 to$17 million (€13.6 to €15.5 million).
Key Metrics – Half Year – Preliminary
Six Months Ended |
Growth Rates % |
|||||||||||||
|
|
|
2nd Half 2019 vs. |
|||||||||||
2nd Half 2019 |
1st Half 2019 |
2nd Half 2018 |
1st Half 2019 |
2nd Half 2018 |
||||||||||
Revenue |
€99.9 Million |
€49.2 Million |
€51.5 Million |
103.0 |
% |
93.9 |
% |
|||||||
Contribution1 |
€43.2 Million |
€20.4 Million |
€24.2 Million |
112.2 |
% |
78.3 |
% |
|||||||
Net Loss |
€(12.0) Million |
€(4.9) Million |
€(2.0) Million |
145.8 |
% |
512.4 |
% |
|||||||
Adjusted EBITDA2 |
€18.7 Million |
€3.8 Million |
€8.5 Million |
388.3 |
% |
119.7 |
% |
|||||||
Cash Balance |
€15.5 Million |
€12.5 Million |
€11.1 Million |
23.9 |
% |
39.3 |
% |
|||||||
Total Registrations3 |
8,229,976 |
4,488,104 |
4,791,652 |
83.4 |
% |
71.8 |
% |
|||||||
Avg. Paying Subs4 |
1,017,321 |
444,857 |
477,817 |
128.7 |
% |
112.9 |
% |
|||||||
Monthly ARPU5 |
€ 16.37 |
€ 18.44 |
€ 17.98 |
(11.2) |
% |
(9.0) |
% |
Key Metrics – Full Year – Preliminary
Growth Rates % |
|||||||||||
2019 |
20188 |
20198 |
20188 |
||||||||
Revenue |
€149.1 Million |
€103.4 Million |
44.2 |
% |
23.8 |
% |
|||||
Contribution1 |
€63.6 Million |
€43.6 Million |
45.9 |
% |
44.9 |
% |
|||||
Net Loss |
€(16.9) Million |
€(4.2) Million |
299.7 |
% |
(45.1) |
% |
|||||
Adjusted EBITDA2 |
€22.5 Million |
€9.8 Million |
129.2 |
% |
118.8 |
% |
|||||
Cash Balance |
€15.5 Million |
€11.1 Million |
39.3 |
% |
35.4 |
% |
|||||
Total Registrations3 |
12,718,080 |
10,144,173 |
25.4 |
% |
20.0 |
% |
|||||
Avg. Paying Subs4 |
731,088 |
483,413 |
51.2 |
% |
27.4 |
% |
|||||
Monthly ARPU5 |
€ 17.00 |
€ 17.83 |
(4.7) |
% |
(2.8) |
% |
|
|||||||||||||||||
SEGMENT6 RESULTS FROM OPERATIONS |
|||||||||||||||||
(Revenue, Direct Marketing and Contribution figures in € thousands) |
|||||||||||||||||
Six Months Ended |
Growth Rates % |
||||||||||||||||
|
|
|
Preliminary 2nd Half 2019 vs. |
||||||||||||||
Preliminary |
1st Half 2019 |
2nd Half 2018 |
1st Half 2019 |
2nd Half 2018 |
|||||||||||||
# of Registrations |
|||||||||||||||||
|
5,283,710 |
2,224,249 |
2,243,178 |
137.6 |
% |
135.5 |
% |
||||||||||
International |
2,946,266 |
2,263,855 |
2,548,474 |
30.1 |
% |
15.6 |
% |
||||||||||
Total # of Registrations |
8,229,976 |
4,488,104 |
4,791,652 |
83.4 |
% |
71.8 |
% |
||||||||||
Average Paying Subscribers |
|||||||||||||||||
|
665,023 |
185,364 |
189,533 |
258.8 |
% |
250.9 |
% |
||||||||||
International |
352,298 |
259,493 |
288,284 |
35.8 |
% |
22.2 |
% |
||||||||||
Total Average Paying Subscribers |
1,017,321 |
444,857 |
477,817 |
128.7 |
% |
112.9 |
% |
||||||||||
Monthly ARPU |
|||||||||||||||||
|
€ |
17.53 |
€ |
23.88 |
€ |
22.45 |
(26.6) |
% |
(21.9) |
% |
|||||||
International |
€ |
14.18 |
€ |
14.56 |
€ |
15.03 |
(2.6) |
% |
(5.7) |
% |
|||||||
Monthly ARPU |
€ |
16.37 |
€ |
18.44 |
€ |
17.98 |
(11.2) |
% |
(9.0) |
% |
|||||||
Total Net Revenue |
|||||||||||||||||
|
€ |
69,947 |
€ |
26,561 |
€ |
25,531 |
163.3 |
% |
174.0 |
% |
|||||||
International |
€ |
29,970 |
€ |
22,663 |
€ |
26,006 |
32.2 |
% |
15.2 |
% |
|||||||
Total Net Revenue |
€ |
99,917 |
€ |
49,224 |
€ |
51,537 |
103.0 |
% |
93.9 |
% |
|||||||
Direct Marketing |
|||||||||||||||||
|
€ |
42,132 |
€ |
16,160 |
€ |
13,277 |
160.7 |
% |
217.3 |
% |
|||||||
International |
€ |
14,586 |
€ |
12,706 |
€ |
14,026 |
14.8 |
% |
4.0 |
% |
|||||||
Total Direct Marketing |
€ |
56,718 |
€ |
28,866 |
€ |
27,303 |
96.5 |
% |
107.7 |
% |
|||||||
Contribution |
|||||||||||||||||
|
€ |
27,815 |
€ |
10,401 |
€ |
12,254 |
167.4 |
% |
127.0 |
% |
|||||||
International |
€ |
15,384 |
€ |
9,957 |
€ |
11,980 |
54.5 |
% |
28.4 |
% |
|||||||
Total Contribution |
€ |
43,199 |
€ |
20,358 |
€ |
24,234 |
112.2 |
% |
78.3 |
% |
|
|||||||||||||||||
SEGMENT6 RESULTS FROM OPERATIONS |
|||||||||||||||||
(Revenue, Direct Marketing and Contribution figures in € thousands) |
|||||||||||||||||
12 Months Ended |
Growth Rates % |
||||||||||||||||
Preliminary |
20188 |
20178 |
Preliminary |
20188 |
|||||||||||||
# of Registrations |
|||||||||||||||||
|
7,507,959 |
4,376,883 |
2,289,036 |
71.5 |
% |
91.2 |
% |
||||||||||
International |
5,210,121 |
5,767,290 |
6,162,597 |
(9.7) |
% |
(6.4) |
% |
||||||||||
Total # of Registrations |
12,718,080 |
10,144,173 |
8,451,633 |
25.4 |
% |
20.0 |
% |
||||||||||
Average Paying Subscribers |
|||||||||||||||||
|
425,193 |
183,794 |
83,870 |
131.3 |
% |
119.1 |
% |
||||||||||
International |
305,895 |
299,619 |
295,533 |
2.1 |
% |
1.4 |
% |
||||||||||
Total Average Paying Subscribers |
731,088 |
483,413 |
379,403 |
51.2 |
% |
27.4 |
% |
||||||||||
Monthly ARPU |
|||||||||||||||||
|
€ |
18.91 |
€ |
21.81 |
€ |
23.77 |
(13.3) |
% |
(8.2) |
% |
|||||||
International |
€ |
14.34 |
€ |
15.39 |
€ |
16.81 |
(6.8) |
% |
(8.4) |
% |
|||||||
Monthly ARPU |
€ |
17.00 |
€ |
17.83 |
€ |
18.35 |
(4.7) |
% |
(2.8) |
% |
|||||||
Total Net Revenue |
|||||||||||||||||
|
€ |
96,508 |
€ |
48,105 |
€ |
23,919 |
100.6 |
% |
101.1 |
% |
|||||||
International |
€ |
52,633 |
€ |
55,333 |
€ |
59,610 |
(4.9) |
% |
(7.2) |
% |
|||||||
Total Net Revenue |
€ |
149,141 |
€ |
103,438 |
€ |
83,529 |
44.2 |
% |
23.8 |
% |
|||||||
Direct Marketing |
|||||||||||||||||
|
€ |
58,292 |
€ |
27,862 |
€ |
17,980 |
109.2 |
% |
55.0 |
% |
|||||||
International |
€ |
27,292 |
€ |
32,026 |
€ |
35,489 |
(14.8) |
% |
(9.8) |
% |
|||||||
Total Direct Marketing |
€ |
85,584 |
€ |
59,888 |
€ |
53,469 |
42.9 |
% |
12.0 |
% |
|||||||
Contribution |
|||||||||||||||||
|
€ |
38,216 |
€ |
20,243 |
€ |
5,939 |
88.8 |
% |
240.8 |
% |
|||||||
International |
€ |
25,341 |
€ |
23,307 |
€ |
24,121 |
8.7 |
% |
(3.4) |
% |
|||||||
Total Contribution |
€ |
63,557 |
€ |
43,550 |
€ |
30,060 |
45.9 |
% |
44.9 |
% |
|
|||
UNAUDITED PRO FORMA FINANCIAL INFORMATION7 |
|||
(in € thousands) |
|||
Year Ended |
|||
2019 |
|||
(in € thousands) |
(pro forma) / preliminary |
||
Revenue |
220,111 |
||
Net loss |
(17,732) |
||
The following table presents certain selected information and Adjusted EBITDA2 for the unaudited pro forma period presented:
Year Ended |
|||
2019 |
|||
(in € thousands) |
(pro forma) / preliminary |
||
Net loss |
(17,732) |
||
Net finance expenses |
12,195 |
||
Income tax expense (benefit) |
(977) |
||
Depreciation and amortization |
17,689 |
||
Impairment of intangible assets and goodwill |
788 |
||
Share-based compensation expense |
3,305 |
||
Acquisition and other costs |
14,253 |
||
Adjusted EBITDA |
29,521 |
||
Year Ended |
|||
2019 |
|||
Summary of acquisition and other costs (in € thousands) |
(pro forma) / preliminary |
||
Contract liabilities write-offs |
14,371 |
||
Gain realized upon sublease commencement |
(1,315) |
||
Project consultant costs |
194 |
||
Other employee payments |
853 |
||
Severance costs |
150 |
||
Total adjustments |
14,253 |
||
Investor Conference Call
The Group will discuss its financial results during a live teleconference today at
Toll-Free (
Toll-Free (
International: 1-201-493-6725
In addition,
A replay will begin approximately three hours after completion of the call and run until
Replay
Toll-Free (
International: 1-412-317-6671
Passcode: 13700746
Preliminary Financial Information
The estimated financial results for the second half and full fiscal year 2019 set forth in this press release are preliminary, unaudited and subject to completion, reflect management's current views and may change as a result of management's review of results and other factors. Such preliminary results are subject to the finalization and closing of
Safe Harbor Statement:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, statements involving known and unknown risks, uncertainties, and other factors that may cause
Any statements in this press release that are not statements of historical fact may be considered to be forward-looking statements. Written words, such as "believes," "hopes," "intends," "estimates," "expects," "projects," "plans," "anticipates," and variations thereof, or the use of future tense, identify forward-looking statements. By their nature, forward-looking statements and forecasts involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the near future. These forward-looking statements include statements regarding
About
For More Information
Investors:
Vice President of Investor Relations
[email protected]
1 Contribution is defined as revenue, net of refunds and credit card chargebacks, less direct marketing. Direct Marketing is defined as online and offline advertising spend and is included within Cost of revenue within
2 Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ("Adjusted EBITDA") is not a measure defined by International Financial Reporting Standards ("IFRS"). The most directly comparable IFRS measure for Adjusted EBITDA is our net (loss)/profit for the relevant period. This measure is one of the primary metrics by which we evaluate the performance of our businesses, budget, forecast and compensate management. We believe this measure provides management and investors with a consistent view, period to period, of the core earnings generated from ongoing operations and excludes the impact of items that we do not consider representative of our ongoing operating performance. This includes: (i) items such as share-based compensation, asset impairments, gains or losses on foreign currency transactions and interest expense, and (ii) items related to acquisitions or other costs that are non-recurring, infrequent, or unusual in nature including contract liabilities write-offs, gains realized upon sublease commencement, transaction and advisory fees, merger integration costs, other employee payments, and severance. Adjusted EBITDA should not be construed as a substitute for net (loss) / profit (as determined in accordance with IFRS) for the purpose of analyzing our operating performance or financial position, as Adjusted EBITDA is not defined by IFRS. A reconciliation of the Adjusted EBITDA for the six months ended
Statements regarding our positioning to deliver Adjusted EBITDA of
3 Total registrations are defined as the total number of new members registering to the platforms with their email address. Those include members who enter into premium subscriptions and free memberships.
4 Paying subscribers are defined as individuals who have paid a monthly fee for access to premium services, which include, among others, unlimited communication with other registered users, access to user profile pictures and enhanced search functionality. Average paying subscribers for each month are calculated as the sum of the paying subscribers at the beginning and the end of the month, divided by two. Average paying subscribers for periods longer than one month are calculated as the sum of the average paying subscribers for each month, divided by the number of months in such period.
5 Monthly Average Net Revenue Per User, or Monthly ARPU, represents the total net subscriber revenue for the period divided by the number of average paying subscribers for the period, divided by the number of months in the period.
6 In accordance with segment reporting guidance, the Group's financial reporting includes detailed data on two separate operating segments. The
7 The unaudited pro forma financial information presents the combined results of the Company and
8 Certain comparative figures for the years ended
|
||||||||||||||||||||
Reconciliation of Net Loss to Adjusted EBITDA |
||||||||||||||||||||
(in € thousands) |
||||||||||||||||||||
Six Months Ended |
Years Ended |
|||||||||||||||||||
Preliminary |
Preliminary |
|||||||||||||||||||
|
|
|
2019 |
2018 |
||||||||||||||||
Net loss |
(11,979) |
(4,874) |
(1,956) |
(16,853) |
(4,216) |
|||||||||||||||
Net finance expenses |
8,831 |
119 |
394 |
8,950 |
958 |
|||||||||||||||
Income tax expense |
(5,246) |
401 |
2,387 |
(4,845) |
1,147 |
|||||||||||||||
Depreciation and amortization |
8,977 |
1,653 |
1,928 |
10,630 |
3,565 |
|||||||||||||||
Impairment of intangible assets and goodwill |
703 |
— |
3,324 |
703 |
3,324 |
|||||||||||||||
Share-based compensation expense |
260 |
2,075 |
2,314 |
2,335 |
4,091 |
|||||||||||||||
Acquisition and other costs |
17,170 |
4,459 |
129 |
21,629 |
970 |
|||||||||||||||
Adjusted EBITDA2 |
18,716 |
3,833 |
8,520 |
22,549 |
9,839 |
|||||||||||||||
Summary of acquisition and other costs |
||||||||||||||||||||
Contract liabilities write-offs |
14,371 |
— |
— |
14,371 |
289 |
|||||||||||||||
Gain realized upon sublease commencement |
(1,259) |
— |
— |
(1,259) |
— |
|||||||||||||||
Transaction and advisory fees |
348 |
4,413 |
— |
4,761 |
264 |
|||||||||||||||
Merger integration costs |
493 |
— |
87 |
493 |
101 |
|||||||||||||||
Other employee payments |
826 |
— |
— |
826 |
— |
|||||||||||||||
Severance costs |
2,391 |
46 |
42 |
2,437 |
316 |
|||||||||||||||
Total adjustments |
17,170 |
4,459 |
129 |
21,629 |
970 |
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